Tuesday's deadline ends the public window on the joint Treasury proposal that would treat permitted payment stablecoin issuers as Bank Secrecy Act institutions. Major banking groups asked regulators to halt the docket until the core GENIUS Act rules are written.
The public comment window on the joint FinCEN and OFAC proposal to implement the Bank Secrecy Act and sanctions-compliance pieces of the GENIUS Act closed at midnight Tuesday. The proposal, issued on April 8 and printed in the Federal Register two days later, would treat permitted payment stablecoin issuers as financial institutions under the BSA, oblige them to run anti-money-laundering programs commensurate with their size and risk, and — for the first time in any US rulemaking — explicitly require a private class of issuers to maintain a sanctions compliance program subject to OFAC enforcement. The deadline is the first major procedural gate since President Trump signed the GENIUS Act into law on July 18 last year.
The substance of the proposal is the part the industry has spent two months arguing about. PPSIs would have to run customer identification programs comparable to a bank's, monitor for suspicious activity and file SARs, screen counterparties against OFAC sanctions lists, and demonstrate the technical capacity to seize, freeze, or burn stablecoins on lawful order. That last requirement is in the statute itself, not the proposed rule, and it is the part stablecoin issuers have been quietly building toward for the last twelve months — Circle and Paxos already have the capability; Tether does not consistently use it; smaller issuers are catching up.
The banking trade associations want the whole thing paused. The American Bankers Association and several other groups wrote to Treasury in April asking that the AML-compliance comment window be held open until the primary GENIUS Act rulemakings — the licensing standards for PPSIs, the reserve composition rules, the redemption requirements — are clearer. Their argument is procedural: it is hard to write a sensible AML program when the underlying definition of who is a PPSI and what they are allowed to do is still in flux. Treasury declined to extend the window, and Tuesday's deadline held.
The industry's substantive complaints break along predictable lines. The largest issuers — the firms that will be PPSIs under almost any reading of the statute — want the AML program rules harmonised with their existing BSA programs so they are not running two parallel compliance stacks. Smaller and prospective issuers want a tiered approach that does not require a $50 million compliance build to launch a stablecoin. Foreign issuers want clarity on how the rules apply to dollar stablecoins issued outside the US and made available to US users through intermediaries. None of those concerns is unreasonable; all of them are the kind of thing that a final rule normally resolves with carve-outs and de minimis thresholds.
The sanctions piece is more politically charged. OFAC's joint role in the rule is the first time a private financial intermediary has been formally required to run a sanctions compliance program at federal level — banks already do this, but the BSA piece for banks is FinCEN-led, and OFAC enforcement is parallel. Putting OFAC directly into the issuer's compliance perimeter is a deliberate choice and a foreseeable one. The Treasury has been clear since the GENIUS Act passed that dollar stablecoins are a sanctions enforcement tool as well as a payments instrument, and the rule reflects that. The civil-liberties critique — that the rule effectively deputises private issuers as sanctions screeners with the technical capacity to freeze user balances — is real but lost the political fight before the statute was signed.
The next deadline that matters is July 18, the one-year anniversary of the GENIUS Act and the date on which several implementing rules are scheduled to take full effect. By then the FinCEN-OFAC rule should be finalised, the Treasury rules on reserve composition and audits should be in place, and the state-level certification regime under which existing state stablecoin frameworks — New York's most prominent among them — can apply for federal equivalence should be operational. The New York Department of Financial Services already proposed alignment amendments in May; other states are watching.
What the comment file shows when it is published is the next signal. If the docket is heavy with detailed proposals from law firms representing the major issuers, it suggests an industry resigned to the framework and trying to shape its edges. If it is heavy with categorical objections from smaller issuers and DeFi-adjacent firms, it suggests the next eighteen months of litigation are already drafted. The mix will be the leading indicator of whether the GENIUS Act lands as the foundation of US dollar stablecoin policy or as the opening round of a longer fight. Companion legislation like the CLARITY Act, which Senate Banking dropped 309 pages of text on in May, is the other piece of the framework still in motion.
Tuesday's deadline is the procedural mile-marker. The substantive fight is just beginning.
